Today’s businesses grow through star performers

By: Chelan David | 6:08am EST July 1, 20148:37am EST July 2, 2014

Star performers, or “rainmakers,” exist across all sectors — think LeBron James in sports or Oprah Winfrey in television. In some cases, they produce 20 or 30 times the average in their fields. And through a combination of skill, passion, drive and energy have the ability to catapult a business to the next level.

Businesses, however, have focused their attention on the middlers, trying to get more from them to move the overall average up. Herman Aguinis, John F. Mee Chair of Management at the Kelley School of Business at Indiana University, says this is a reliance on an outdated archetype.

Research compiled by Aguinis and Ernest O’Boyle Jr., a professor at the University of Iowa, is making noise in the business community. Studying a diverse pool — more than 633,000 professors, entertainers, politicians and athletes — they discovered that in every profession, a fairly significant amount of star performers dominated while the majority fell below the mean.

According to Aguinis, the presence of star performers who have the ability to outpace their peers is becoming a staple of the 21st century workplace. Today’s workers are buoyed by empowering technologies and are capable of performing far above average.

“From receiving a Pulitzer prize to scoring points in the NBA, the consistent finding is that there is a small minority of performers who make a disproportionate contribution in terms of output,” Aguinis says.

An outdated model

The bell curve is a common evaluation model used to determine grades, performance and compensation. The concept dates back to the 1920s when studies of assembly line manufacturing, documenting the output of workers, revealed a bell-shaped curve. The pace of the assembly line limited workers. Even the strongest and most motivated couldn’t deviate much from the norm in terms of productivity.

“The nature of work in the 21st century is very different. There are no longer constraints on performance,” Aguinis says. “The Internet allows for virtually unlimited access to information and the ability to communicate with people all over the world. The resources now available allow for the emergence of star performers, which wasn’t possible in the past.”

The implications of the study are far-reaching. Star performers account for the majority of output reflecting the 80/20 rule, where 80 percent of the work is accomplished by 20 percent of the people. But if star performers improve just a little bit, the whole organization benefits immensely.

Historically, however, businesses have focused their attention on the middle portion of the bell curve attempting to move the average up. A conundrum for many managers is allocating the majority of their precious time to less productive employees. Meanwhile, overachievers are often left to their own accord, guided primarily by their talent and ambition.

Aguinis’ research suggests that supervisors should spend less time on getting underperformers up to speed and more time with star performers. For example, say a star salesperson consistently bills $1 million a month. With added guidance perhaps they can add 10 percent a month to their total, or $100,000 to the bottom line.

A weaker salesperson bills $100,000. With the same extra support they may similarly add 10 percent a month, which would equal $10,000. That’s a $90,000 difference with the same personnel and allocation of resources.

New-age thinking

It’s critical to attract and retain star performers. Performance-based pay and increased flexibility can attract top talent while seniority policies and longevity-based promotions are turnoffs.

Performance standards should be clear and transparent. It shouldn’t matter who the person is or how long they’ve been there. Everyone who achieves a goal should get the same reward.

Not only is it important to keep star performers in the fold, but also to encourage them to help bring others with them to the top. This requires individualized programs since different people are motivated by different factors. Some will want more money, others more autonomy, training or resources.

“The key is to talk to star performers and ask them directly, ‘What can we do to allow you to continue this fantastic level of performance, and what can we do so that you help others achieve this level of performance?’” Aguinis says. “If you’re not rewarding people for excellent performance, you’re less likely to see excellent performance.”

Not everyone, no matter his or her desire, will rise to the top. It’s important to communicate that achieving less than superstar numbers doesn’t mean an employee is inadequate.

“Being a solid B average worker is fine,” Aguinis says. “Companies need many solid B average workers to keep the wheels turning.”

Keeping the peace

Oftentimes, when star performers emerge they create a threat to others within an organization. Aguinis says that from a top management perspective it is crucial to neutralize the negative impact of disgruntled B-level employees on A-level employees, particularly when a star performer’s boss feels threatened.

“The best way to do this is to reward a supervisor when their subordinate does great work,” he advises. “That way the supervisor doesn’t feel threatened. On the contrary, they promote the performance of their subordinates.”

In order to enhance the number of people who can be classified as star performers, Aguinis says the first step is to understand what a firm’s strategic goals are.

Once this has been established, the next step is to develop a clear understanding of the expectations of individual behavior. Attracting, grooming and retaining star performers is a top down process.

“You need to create a system so you know what top performance means in the context of your business, how you measure it and identify who is achieving those levels,” he says. “Then you need to retain them, hire more of them and create systems so these people motivate others to be as good as they are. Following these steps systematically leads to business success.”

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Herman Aguinis

John F. Mee Chair of Management, Kelley School of Business at Indiana University